What happened
Backblaze shares jumped 26.94% on Tuesday after the cloud storage company reported second-quarter revenue of $42.7 million (up 18% year over year), with B2 Cloud Storage revenue surging 34% to $26.6 million. The company also signed a more than 5-year $335 million collaboration with AI infrastructure provider CoreWeave, which acquired warrants in Backblaze valued at roughly $22 million.
Why it matters
Backblaze's hardware-software integration lets it offer affordable, high-performance storage for AI workloads—a market segment with strong tailwinds. High-value customers (those generating $50,000+ annual recurring revenue) jumped 57%, and the company's B2 Cloud Storage net revenue retention rate hit 113%, showing both new customer wins and existing customer expansion. Adjusted earnings per share of $0.08 beat Wall Street's estimate of $0.02 by four times.
What to watch
Backblaze raised full-year revenue guidance to roughly $173 million (from $162.5 million) and lifted its adjusted EBITDA margin target to 28% (from 24%). The CoreWeave partnership signals validation from a major AI infrastructure player and positions Backblaze as a critical storage partner for large-scale AI deployments.
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Backblaze's second-quarter results reflect a structural shift in storage demand driven by AI workload scaling. The 57% surge in high-value customers ($50,000+ annual recurring revenue) and a net revenue retention rate of 113% on B2 Cloud Storage indicate both strong new customer acquisition and expansion within the existing base—a healthy growth profile that resonates with investors. The company's ability to bundle specialized hardware and software into affordable, high-performance solutions addresses a specific pain point for AI infrastructure operators.
The CoreWeave partnership is particularly significant: it is not merely a revenue contract but a 5+ year commitment backed by $335 million and strategic equity warrants. CoreWeave's willingness to acquire roughly $22 million in Backblaze warrants suggests confidence that Backblaze will benefit directly from the AI infrastructure buildout. CEO Gleb Budman's framing—that "AI workloads need a capacity storage layer that can scale to exabytes, while delivering performance at attractive economics"—reflects market recognition that cost-effective, scalable storage is a genuine bottleneck for hyperscalers training and deploying large models.
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